BT is to pay out up to £129million to extend the Government-led roll-out of superfast broadband, after a bigger-than-expected take-up of the service.

The funding will be made available to local authorities to reinvest the money in providing superfast broadband coverage to more homes and businesses, and earlier than previously planned.

Today’s announcement came alongside first quarter results from the telecoms giant showing a 16% increase in pre-tax profits for the three months to June 30 to £632million, which BT said put it on track to achieve its forecasts for the full year.

The broadband funding is the result of a clause in contracts agreed by BT that allows funding it has received to be returned or reinvested into further coverage if take-up is better than the 20% assumed in its orginal business case.

A higher take-up rate so far has now resulted in BT making a new business case assumption of reaching 30% take-up in the areas which benefit.

John Whittingdale, Secretary of State for Culture, Media and Sport and MP for Maldon, said: “The Government was clear from the start that as levels of people taking up superfast broadband went beyond our expectations in areas where we invested public money, BT would reimburse the taxpayer for reinvesting into further coverage across the UK.

“This now means that BT will be providing up to £129m cashback for some of the most hard to reach areas. Our £1.7billion superfast broadband programme is on track to reach at least 95% of the UK by 2017, and it is great to see homes and businesses making the most of everything that superfast speeds have to offer.”

BT chief executive Gavin Patterson said: “BT’s fibre network is accessible to more than 23m premises. Four out of five UK homes and businesses can access it and 4.6m are now connected. We’ve hit our original take-up assumption and have rolled out ahead of target and on budget. This is a real success story for the UK.”

He added: “BT will work with local bodies over the coming months to identify where these funds can be provided early to enable the local bodies to invest in increased fibre coverage sooner than would previously have been the case.”

The increase in first quarter profits at BT was achieved on revenues broadly flat at £4.36billion.

Mr Patterson said: “Our mobile plans have got off to a good start with more than 100,000 consumer mobile customers signed up in the first three months.

“We’re also looking forward to completing our acquisition of EE, which will allow us to create a true UK digital champion, providing customers with greater choice and value and helping to deliver the UK’s connected future.”

BT’s television business is in line for a further boost with the imminent launch of BT Sport Europe, which will offer exclusive coverage of UEFA Champions League football,

Mr Patterson said BT had also invested further in improving customer service and was engaging with regulator Ofcom as part of its Strategic Review of Digital Communications, which offered scope for deregulation and the potential to create a more level playing field in pay-TV.

He added: “The investments we are making in our business and customer service are building a strong platform for growth. And our financial results show we’re on track to achieve our outlook for the full year.”